One of the coolest things about Rocksmith is that, while you do need a real guitar to play it, you don't need an expensive guitar. You can play Rocksmith with a cheap, no-name knock-off just well as a hand-made custom. With one caveat: Make sure you've got good strings.
[WARNING: If you think Epiphone guitars aren't worth playing simply because they aren't Gibsons, read no further. This blog is not for you. The Gibson/Epiphone argument won't be entertained here. If Epiphone guitars were good enough for Les Paul himself to use in the studio, they're good enough for me. End of discussion.]
A few years ago I decided to get electric guitars for my kids for Christmas. My kids were only 8and 10 years old at the time, so I got some really, really cheap guitars. They cost maybe $40 each. Somebody was selling a bunch of blemished guitars on-line - really cheap and perfect for my purpose. If the kids tore them up, I wasn't out much.
I doubt those guitars had been played in the past 3 years. But, I put down my Epiphone Les Paul this weekend and grabbed my son's old guitar just to see what it would do. As cheap as it was, this guitar worked just fine with Rocksmith. To my surprise, it was still pretty close to being in tune after many months of lying around in a gig bag (even though it's got the same strings on it that came on it over 3 years ago). The ability of a guitar to stay in tune is probably one of the most important things to look for in a Rocksmith interface - or, really, any student guitar. Sustains may be a little weak on a cheap axe and this might cost you a few bonus points when playing, but crappy sustain won't actually hurt your score in most Rocksmith songs. The most important thing is that when you play a G on your guitar, Rocksmith "hears" a G and not a G-flat.
Plenty of wanna-be rock stars on Internet forums will tell you that you absolutely must spend at least $300 on a student guitar, but that's a load of crap. My son's $40 thrasher is easy to play, doesn't buzz, and stays in tune. For playing Rocksmith, that's all you need. Unless you plan to play in front of other people for money, that's probably all you'll ever need. Period. (Plus, my son's $40 thrasher weighs about half as much as my Epiphone Les Paul, which is lighter than a Gibson Les Paul by about 3 pounds; a cheapie is much easier for my son to handle. A 12 lb. guitar gets very heavy after a while, even for a grown man.)
You don't need a great guitar to play Rocksmith, but there's a limit to how far you can take the cheap road. For example, don't buy your guitar strings at Wal-Mart.
Because I had been playing my guitar a LOT lately, I decided to restring my Les Paul this weekend. I had ten sets of strings lying around so I grabbed a set, put them on, and fired up Rocksmith for another session. And, suddenly, instead of getting better, my scores on songs that I've been playing for a few weeks started dropping. I couldn't get a Phrase Level Up no matter what I tried. And, just about every note I played was either sharp or flat. There were more yellow arrows and Phrase Level Down and Late and Missed Pull-off messages on the screen than notes. Didn't take long to guess what the problem was.
A year or two ago I found a bunch of guitar strings on sale for a really, really good price. Now, I have a pretty good understanding of both metallurgy and economics and I'm not generally a betting man. But, when I find something marked down to give-away prices - in this case, full sets of brand new guitar strings for $1.00 - I'm almost always willing to take a chance. So, I bought 10 sets. Since I'm not really a guitar player, don't play a lot, and rarely change strings, 10 sets represented a virtual lifetime supply of guitar strings for me. And, ten bucks is roughly what I'd normally spend on one set of strings. So, I think I can be forgiven for ignoring the fact that these were First Act brand strings on the clearance aisle at Wal-Mart. What I had were toy strings for toy guitars. Apparently they're made of recycled beer cans because they sound like crap right after tuning and then they go out of tune and sound worse.
Lesson: Do NOT use cheap guitar strings, not even on a cheap guitar! Cough up ten bucks for some decent strings.
Before I tanked my progress on Rocksmith, I had to make an emergency run to my local big-box music retailer to buy some real guitar strings. I actually found a promo 3-pack from a very well-known guitar maker on sale for less than $7.00. It was hard to believe the difference in sound and the effect on my Rocksmith scores. In a way, this makes sense. On an electric guitar, the strings are really the only things making sound; there's no guitar body to resonate that sound, just some electrical pick-ups to translate the sound into electrical signals. Of course you can spend more money and get nicer sustains and better intonation, but keep things in perspective. Most of the songs in Rocksmith (and rock in general) use considerable amounts of distortion and reverb; a $40 cheap-o guitar is going to sound just as good as a 1952 Gibson Les Paul Custom. And, if you're playing Rocksmith, you probably aren't going to pay $1000 for a guitar anyway. The good news is you don't need to!
So, don't even let the fact that you don't own an electric guitar keep you from checking out Rocksmith. Go buy a cheap guitar and play! Just make sure you get some good strings.
(Rocksmith and Epiphone also offer an official bundle which includes Rocksmith and an Epiphone guitar. Not a bad option for anyone who doesn't already have a guitar lying around.)